The Financial Supervisory Commission (FSC) is considering allowing more types of corporate customers to apply for loans online to help them weather the COVID-19 pandemic without creating a loophole for money laundering, it said on Thursday.
The commission currently only allows sole proprietorships — companies owned by a single individual — to apply for loans completely online, as their shareholding structure is simple and it is easier for lenders to conduct know-your-customer (KYC) reviews on the companies and their owners.
As banks have adjusted their branch hours since the start of a nationwide level 3 COVID-19 alert last month and more small-sized companies need to apply for relief loans amid rising infections, the FSC is considering relaxing its regulations, Banking Bureau Chief Secretary Phil Tong (童政彰) told a videoconference.
“The commission might permit companies owned by two or three individuals to apply for loans online, as it should not be too difficult for banks to conduct KYC on three individuals,” Tong said.
Banks need to review the individual shareholders’ credit and financial profiles, and exercise due diligence on the companies before approving a loan application, Tong said.
The FSC has asked the Bankers Association to set up measures to facilitate such a practice, while the institution must also modify disciplinary guidelines for its members, he said.
To prevent money laundering, the commission would not consider allowing other kinds of companies, such as those owned by more than three shareholders or firms that are owned by another corporation, to apply for loans online, as conducting KYC and due diligence would be more challenging, he said.
The FSC has approved a proposal from the Bankers Association enabling banks to offer loans for existing corporate customers that have applied for loans online, as lenders already have their profiles and the risks of money laundering or defaults would be smaller, Tong said.
Meanwhile, more than 403,000 companies and individuals have applied for NT$3.49 trillion (US$126.31 billion) of relief loans as of Wednesday last week, FSC data showed yesterday.
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